Net sales were $199.3 million, an increase of 15.6% compared to 2016.
Net sales increased 11.7% as a result of the Q2 2016 acquisition in
AEC (see Tables 1 and 2).

Net income attributable to the Company was $10.8 million ($0.34 per
share), compared to $13.5 million ($0.42 per share) in Q1 2016.

Net income attributable to the Company, excluding adjustments (a
non-GAAP measure), was $0.46 per share in both Q1 2017 and Q1 2016
(see Table 11).

Adjusted EBITDA (a non-GAAP measure) was $43.5 million compared to
$41.3 million in Q1 2016 (see Tables 7 and 8).

ROCHESTER, N.H.--(BUSINESS WIRE)--May 4, 2017--
Albany International Corp. (NYSE:AIN) reported that Q1 2017 net income
attributable to the Company was $10.8 million, including a net charge of
$0.8 million for income tax adjustments. Q1 2016 net income attributable
to the Company was $13.5 million, including favorable income tax
adjustments of $1.0 million.

Q1 2017 income before income taxes was $17.5 million, including
restructuring charges of $2.7 million, and losses from foreign currency
revaluation of $1.9 million. Q1 2017 income before income taxes also
includes $0.6 million of professional fees related to the integration of
the Q2 2016 acquisition of Harris Corporation’s composite aerostructures
division (referred to below as “SLC”). Q1 2016 income before income
taxes was $20.4 million, including restructuring charges of $0.7
million, losses of $1.4 million from foreign currency revaluation, and
$1.6 million of expenses related to the acquisition.

Table 1 summarizes key financial metrics of SLC, which is included in
the AEC segment:

In comparison to Q1 2016, MC net sales increased in tissue and packaging
grades but that increase was offset by declines in the publication
grades. The increase in AEC net sales was primarily due to the Q2 2016
acquisition and growth in LEAP.

First-quarter gross profit increased to $75.9 million in 2017 from $72.5
million in 2016. Gross profit margin in Q1 2017 was 38.1% compared to
42.1% in Q1 2016, reflecting the change in the business mix due to
higher AEC sales. MC gross profit was $69.2 million (48.5% of net sales)
in Q1 2017, compared to $69.6 million (47.9% of net sales) in Q1 2016.
AEC gross profit increased to $6.8 million (12.1% of net sales) in Q1
2017, compared to $3.1 million (11.5% of net sales) in Q1 2016.

Q1 2017 selling, technical, general, and research (STG&R) expenses were
$51.2 million, or 25.7% of net sales, including losses of $1.8 million
from the revaluation of nonfunctional-currency assets and liabilities,
and $0.6 million of professional fees related to the integration of SLC.
Q1 2016 STG&R expenses were $49.6 million, or 28.8% of net sales,
including losses of $1.9 million from the revaluation of
nonfunctional-currency assets and liabilities, and $1.6 million of
expenses related to the Q2 2016 acquisition. The reduction in STG&R
expenses as a percentage of net sales in 2017 reflects the relative
growth of AEC which carries lower STG&R expenses as a percentage of net
sales.

The following table summarizes first-quarter expenses associated with
internally funded research and development by segment:

Table 3

Research and developmentexpenses by segmentThree
Months endedMarch 31,

(in thousands)

2017

2016

Machine Clothing

$4,519

$4,337

Albany Engineered Composites

3,076

2,681

Total

$7,595

$7,018

The following table summarizes first-quarter operating income by segment:

Table 4

Operating Income/(loss)Three Months endedMarch 31,

(in thousands)

2017

2016

Machine Clothing

$38,261

$37,139

Albany Engineered Composites

(5,114)

(3,706)

Corporate expenses

(11,091)

(11,164)

Total

$22,056

$22,269

AEC incurred restructuring charges of $2.6 million in the first quarter
of 2017, principally related to a reduction in personnel in SLC. Table 5
presents the effect on operating income resulting from restructuring,
currency revaluation, and acquisition expenses:

Table 5

Expenses in Q1 2017resulting from

Expenses/(gain) in Q1 2016resulting from

(in thousands)

Restructuring

Revaluation

Restructuring

Revaluation

Acquisitionexpenses

Machine Clothing

$110

$1,663

$698

$1,890

$ -

Albany Engineered Composites

2,571

98

-

5

1,596

Corporate expenses

-

1

(19)

2

-

Total

$2,681

$1,762

$679

$1,897

$1,596

Q1 2017 Other income/expense, net, was expense of $0.2 million,
including losses related to the revaluation of nonfunctional-currency
balances of $0.1 million. Q1 2016 Other income/expense, net, was income
of $0.3 million, including income related to the revaluation of
nonfunctional-currency balances of $0.5 million.

Q1 2017 Interest expense, net, was $4.3 million, compared to $2.2
million in Q1 2016. The increase was due to higher debt as a result of
the acquisition of SLC in Q2 2016.

The Company’s income tax rate based on income from continuing operations
was 32.6% for Q1 2017, compared to 39.7% for Q1 2016. The decrease in
the rate was due to a shift in the mix of pretax income in the
jurisdictions in which we operate. Discrete tax items increased income
tax expense by $0.8 million in Q1 2017, and decreased income tax expense
by $1.0 million in Q1 2016.

The following tables provide a reconciliation of operating income and
net income to EBITDA and Adjusted EBITDA:

Table 7

Three Months ended March 31, 2017(in thousands)

MachineClothing

AlbanyEngineeredComposites

Corporateexpensesand other

TotalCompany

Operating income/(loss) (GAAP)

$38,261

$(5,114)

$(11,091)

$22,056

Interest, taxes, other income/expense

-

-

(11,082)

(11,082)

Net income (GAAP)

38,261

(5,114)

(22,173)

10,974

Interest expense, net

-

-

4,328

4,328

Income tax expense

-

-

6,550

6,550

Depreciation and amortization

8,287

7,804

1,202

17,293

EBITDA (non-GAAP)

46,548

2,690

(10,093)

39,145

Restructuring expenses, net

110

2,571

-

2,681

Foreign currency revaluation losses

1,663

98

102

1,863

Pretax (income) attributable to non-controlling interest in ASC

-

(171)

-

(171)

Adjusted EBITDA (non-GAAP)

$48,321

$5,188

$(9,991)

$43,518

Table 8

Three Months ended March 31, 2016(in thousands)

MachineClothing

AlbanyEngineeredComposites

Corporateexpensesand other

TotalCompany

Operating income/(loss) (GAAP)

$37,139

$(3,706)

$(11,164)

$22,269

Interest, taxes, other income/expense

-

-

(8,953)

(8,953)

Net income (GAAP)

37,139

(3,706)

(20,117)

13,316

Interest expense, net

-

-

2,238

2,238

Income tax expense

-

-

7,043

7,043

Depreciation and amortization

9,318

3,395

2,107

14,820

EBITDA (non-GAAP)

46,457

(311)

(8,729)

37,417

Restructuring expenses, net

698

-

(19)

679

Foreign currency revaluation (gains)/losses

1,890

5

(477)

1,418

Acquisition expenses

-

1,596

-

1,596

Pretax loss attributable to non-controlling interest in ASC

-

187

-

187

Adjusted EBITDA (non-GAAP)

$49,045

$1,477

$(9,225)

$41,297

Payments for capital expenditures increased to $25.1 million in Q1 2017,
compared to $8.1 million in Q1 2016, primarily due to the ramp in AEC
programs. Depreciation and amortization was $17.3 million in Q1 2017,
compared to $14.8 million in Q1 2016. As noted in Table 1, depreciation
and amortization for SLC was $3.9 million in Q1 2017.

CFO Comments

CFO and Treasurer John Cozzolino commented, “As is typical for the first
quarter, cash flow was negatively impacted by incentive compensation
payments, seasonal increases in accounts receivable and inventory, and
high first-quarter income tax payments. In Q1 2017, these typical cash
flow effects were compounded by sharp increases in receivables,
inventory, and capital expenditures associated with multiple program
ramps in AEC.For the total Company, the net effect of higher
receivables and inventory, combined with reductions in accrued
liabilities, was a use of cash of approximately $31 million during the
quarter. Payments for capital expenditures in Q1 were about $25 million
and we continue to estimate full-year spending in 2017 to be $95 million
to $105 million. At this rate of spending for capital expenditures, we
expect additional quarterly increases in net debt for the remainder of
the year, but at a considerably lower level than in Q1.

“Total debt decreased a little over $4 million to $480 million as of the
end of the quarter, while cash balances decreased about $38 million to a
total of $143 million. The combined effect of those two changes resulted
in a $34 million increase to net debt (total debt less cash, see Table
14) to a balance of $337 million as of the end of the quarter. The
Company’s leverage ratio, as defined in our primary debt agreements, was
2.30 at both the end of Q1 2017 and Q4 2016, well below our limit of
3.50.

“The Company’s income tax rate based on income from continuing
operations was about 33% in Q1 2017, compared to 35% for the full-year
2016. We continue to expect the full-year tax rate for 2017 to be
similar to the rate in 2016. Cash paid for income taxes was about $9
million in Q1, and we estimate cash taxes in 2017 to range from $25
million to $30 million.”

CEO Comments

CEO Joseph Morone said, “In Q1 2017, both businesses continued to
perform well and in line with our short- and long-term expectations and
objectives. MC once again generated strong income and strong new product
performance, while AEC once again generated strong growth and executed
well on each of its key programs, while continuing to position itself
for improved profitability and new business.

“In MC, sales were essentially flat, both sequentially and in comparison
to Q1 2016. There were no significant deviations from recent market
trends during the quarter. Once again, a significant decline in
publication grade sales was offset by incremental gains in the other
grades, most notably during Q1 in tissue. By the end of Q1, the
publication grades accounted for 23% of total sales, compared to 25% in
Q1 2016, 27% in Q1 2015, and 30% in Q1 2014. Our new product performance
continued to be strong across all product lines, especially in tissue.
Competitive pricing pressure remained intense, particularly in Europe
and Asia, although the topline impact was offset by volume growth in
Asia.

“Profitability was once again strong in Q1 2017 due to incremental
productivity gains and good plant utilization. Gross margin, segment net
income and Adjusted EBITDA were in line with the excellent performance
levels of Q1 2016.

“As for our outlook in MC, the market appears stable and we enter Q2
with a good order backlog. Although we have been anticipating and are
seeing some inflationary pressures, MC remains on track toward its
full-year objective of annual Adjusted EBITDA in the middle of that $180
million to $195 million range that we have discussed on numerous
occasions. (See Table 15 for reconciliation to GAAP net income for this
segment.)

“AEC continued on its path of accelerating growth. Q1 sales grew to $56
million, from $27 million in Q1 2016, the last quarter before we
acquired SLC. Excluding SLC, sales grew by $9 million or 34%. The
quarter began slowly for AEC, but revenue accelerated as the quarter
progressed, and the business remains on track toward its full-year
target of 25% to 35% revenue growth over 2016.

“The growth was led once again by LEAP. AEC continues to execute on the
very aggressive LEAP ramp schedule, while the LEAP engine program
continues to perform well in the marketplace. The order backlog for LEAP
exceeded 12,000 engines at the end of Q1 with no signs of market
softening, CFM delivered its 100th LEAP engine during the quarter, and
the LEAP engines in service are performing well and meeting their
performance targets.

“Q1 sales in SLC were flat compared to Q4, but as with the rest of AEC,
we expect a sharp increase in SLC sales for the balance of 2017. It has
been a full year since our acquisition of SLC, and our experience to
date – particularly our experience with SLC’s customers – validates our
view of the growth potential that motivated the acquisition. In SLC’s
key growth and legacy programs, the near- and long-term demand outlook
is strong and SLC is meeting customer expectations. Of particular note
since our last earnings call are two recent developments in the CH-53K
program. SLC was informed during Q1 that it was selected by Sikorsky as
its supplier of the year for the CH-53K. And in early April, the CH-53K
program was officially approved by the Department of Defense to enter
into low-rate initial production. At full-rate production next decade
and with no additional content, this program has the potential to
generate as much as $150 million per year of revenue.

“While AEC segment net income declined compared to Q1 2016, due to
increases in depreciation expense and restructuring, Adjusted EBITDA
improved significantly, both in absolute terms and as a percent of
sales. Profitability was held back by a still substantial effort to
complete the integration of SLC into AEC. The AEC ERP system
successfully went live in SLC in February, but the usual inefficiencies
associated with learning a new system and modifying work processes will
continue to be a drag on productivity well into the second half of the
year. Shortly after the end of the quarter, SLC announced a significant
restructuring, which coupled with continuous improvement in operations,
should result in gradual improvements to profitability by the end of
this year.

“Q1 was also marked by a significant increase in new business
development activity in AEC. As previously mentioned, AEC is pursuing
new business opportunities on three fronts: existing aerospace
platforms, new aerospace platforms, and diversification outside of
aerospace. While there were promising developments during Q1 on all
three fronts, the most notable were on existing aerospace platforms. AEC
received a significant number of formal requests-for-proposal as well as
more preliminary expressions of interest from a broad cross-section of
OEMs, largely prompted by AEC’s execution and emphasis on lean
manufacturing in its existing programs with those OEMs.

“As for our outlook for AEC, we continue to expect full-year revenue to
be 25% to 35% higher than full-year 2016, and Adjusted EBITDA as a
percentage of sales to slowly improve. For the longer term, the
intensity of new business development activity in Q1 suggests that there
is more upside than downside risk to our current estimate of $450
million to $500 million revenue potential by 2020, as well as potential
for substantial growth beyond 2020.

“In sum, this was a good quarter for both businesses, as MC generated
strong Adjusted EBITDA and AEC strong growth. Both businesses remain
firmly on track toward their short- and long- term goals. For 2017, MC
is on track toward full-year Adjusted EBITDA in the middle of our
expected range, and AEC is on track for full-year revenue growth between
25% and 35% coupled with gradually improving Adjusted EBITDA as a
percentage of sales.”

About Albany International Corp.

Albany International is a global advanced textiles and materials
processing company, with two core businesses. Machine Clothing is the
world’s leading producer of custom-designed fabrics and belts essential
to production in the paper, nonwovens, and other process industries.
Albany Engineered Composites is a rapidly growing supplier of highly
engineered composite parts for the aerospace industry. Albany
International is headquartered in Rochester, New Hampshire, operates 22
plants in 10 countries, employs 4,400 people worldwide, and is listed on
the New York Stock Exchange (Symbol AIN). Additional information about
the Company and its products and services can be found at www.albint.com.

This release contains certain non-GAAP metrics, including: percent
change in net sales excluding currency rate effects (for each segment
and the Company as a whole); EBITDA and Adjusted EBITDA (for each
segment and the Company as a whole, represented in dollars or as a
percentage of net sales); net debt; and net income per share
attributable to the Company, excluding adjustments. Such items are
provided because management believes that, when reconciled from the GAAP
items to which they relate, they provide additional useful information
to investors regarding the Company’s operational performance.

Presenting increases or decreases in sales, after currency effects
are excluded, can give management and investors insight into underlying
sales trends. EBITDA, or net income with interest, taxes, depreciation,
and amortization added back, is a common indicator of financial
performance used, among other things, to analyze and compare core
profitability between companies and industries because it eliminates
effects due to differences in financing, asset bases and taxes. An
understanding of the impact in a particular quarter of specific
restructuring costs, acquisition expenses, currency revaluation, or
other gains and losses, on net income (absolute as well as on a
per-share basis), operating income or EBITDA can give management and
investors additional insight into core financial performance, especially
when compared to quarters in which such items had a greater or lesser
effect, or no effect. Restructuring expenses in the MC segment, while
frequent in recent years, are reflective of significant reductions in
manufacturing capacity and associated headcount in response to shifting
markets, and not of the profitability of the business going forward as
restructured. Net debt is, in the opinion of the Company, helpful to
investors wishing to understand what the Company’s debt position would
be if all available cash were applied to pay down indebtedness. EBITDA,
Adjusted EBITDA and net income per share attributable to the Company,
excluding adjustments, are performance measures that relate to the
Company’s continuing operations.

Percent changes in net sales, excluding currency rate effects, are
calculated by converting amounts reported in local currencies into U.S.
dollars at the exchange rate of a prior period. That amount is then
compared to the U.S. dollar amount reported in the current period. The
Company calculates EBITDA by removing the following from Net income:
Interest expense net, Income tax expense, Depreciation and amortization.
Adjusted EBITDA is calculated by: adding to EBITDA costs associated with
restructuring and pension settlement charges; adding (or subtracting)
revaluation losses (or gains); subtracting (or adding) gains (or losses)
from the sale of buildings or investments; subtracting insurance
recovery gains; subtracting (or adding) Income (or loss) attributable to
the non-controlling interest in Albany Safran Composites (ASC); and
adding expenses related to the Company’s acquisition of Harris
Corporation’s composite aerostructures division. Adjusted EBITDA may
also be presented as a percentage of net sales by dividing it by net
sales. Net income per share attributable to the Company, excluding
adjustments, is calculated by adding to (or subtracting from) net income
attributable to the Company per share, on an after-tax basis:
restructuring charges; discrete tax charges (or gains) and the effect of
changes in the income tax rate; foreign currency revaluation losses (or
gains); acquisition expenses; and losses (or gains) from the sale of
investments.

EBITDA, Adjusted EBITDA, and net income per share attributable to the
Company, excluding adjustments, as defined by the Company, may not be
similar to EBITDA measures of other companies. Such measures are not
considered measurements under GAAP, and should be considered in addition
to, but not as substitutes for, the information contained in the
Company’s statements of income.

The Company discloses certain income and expense items on a per-share
basis. The Company believes that such disclosures provide important
insight into underlying quarterly earnings and are financial performance
metrics commonly used by investors. The Company calculates the quarterly
per-share amount for items included in continuing operations by using
the income tax rate based on income from continuing operationsand
the weighted-average number of shares outstanding for each period.
Year-to-date earnings per-share effects are determined by adding the
amounts calculated at each reporting period.

* Due to the uncertainty of these items, management is currently unable
to project restructuring expenses and foreign currency revaluation
gains/losses for the remainder of the year.

This press release may contain statements, estimates, or projections
that constitute “forward-looking statements” as defined under U.S.
federal securities laws. Generally, the words “believe,” “expect,”
“intend,” “estimate,” “anticipate,” “project,” “will,” “should,” “look
for,” and similar expressions identify forward-looking statements, which
generally are not historical in nature. Forward-looking statements are
subject to certain risks and uncertainties (including, without
limitation, those set forth in the Company’s most recent Annual Report
on Form 10-K or Quarterly Report on Form 10-Q) that could cause actual
results to differmaterially from the Company’s historical
experience and our present expectations or projections.

Forward-looking statements in this release or in the webcast include,
without limitation, statements about macroeconomic, geopolitical and
paper-industry trends and conditions during 2016 and in future years;
expectations in 2017 and in future periods of sales, EBITDA, Adjusted
EBITDA (both in dollars and as a percentage of net sales), income, gross
profit, gross margin, cash flows and other financial items in each of
the Company’s businesses, including the acquired composite
aerostructures business, and for the Company as a whole; the timing and
impact of production and development programs in the Company’s AEC
business segment and the sales growth potential of key AEC programs, as
well as AEC as a whole; the amount and timing of capital expenditures,
future tax rates and cash paid for taxes, depreciation and amortization;
future debt and net debt levels and debt covenant ratios; and changes in
currency rates and their impact on future revaluation gains and losses.
Furthermore, a change in any one or more of the foregoing factors could
have a material effect on the Company’s financial results in any period.
Such statements are based on current expectations, and the Company
undertakes no obligation to publicly update or revise any
forward-looking statements.

Statements expressing management’s assessments of the growth
potential of its businesses, or referring to earlier assessments of such
potential, are not intended as forecasts of actual future growth, and
should not be relied on as such. While management believes such
assessments to have a reasonable basis, such assessments are, by their
nature, inherently uncertain. This release and earlier releases set
forth a number of assumptions regarding these assessments, including
historical results, independent forecasts regarding the markets in which
these businesses operate, and the timing and magnitude of orders for our
customers’ products.

Historical growth rates are no guarantee of future growth, and such
independent forecasts and assumptions could prove materially incorrect
in some cases.

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(unaudited)

Three Months EndedMarch 31,

2017

2016

Net sales

$

199,277

$

172,331

Cost of goods sold

123,372

99,830

Gross profit

75,905

72,501

Selling, general, and administrative expenses

40,906

39,421

Technical and research expenses

10,262

10,132

Restructuring expenses, net

2,681

679

Operating income

22,056

22,269

Interest expense, net

4,328

2,238

Other expense/(income), net

204

(328

)

Income before income taxes

17,524

20,359

Income tax expense

6,550

7,043

Net income

10,974

13,316

Net income/(loss) attributable to the noncontrolling interest

135

(185

)

Net income attributable to the Company

$

10,839

$

13,501

Earnings per share attributable to Company shareholders - Basic

$

0.34

$

0.42

Earnings per share attributable to Company shareholders - Diluted

$

0.34

$

0.42

Shares of the Company used in computing earnings per share:

Basic

32,128

32,041

Diluted

32,164

32,081

Dividends declared per share, Class A and Class B

$

0.17

$

0.17

ALBANY INTERNATIONAL CORP.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

March 31,

December 31,

2017

2016

ASSETS

Cash and cash equivalents

$

143,333

$

181,742

Accounts receivable, net

174,339

171,193

Inventories

150,481

133,906

Income taxes prepaid and receivable

5,224

5,213

Prepaid expenses and other current assets

11,245

9,251

Total current assets

484,622

501,305

Property, plant and equipment, net

432,465

422,564

Intangibles, net

64,685

66,454

Goodwill

161,089

160,375

Income taxes receivable and deferred

69,505

68,865

Contract receivables

17,960

14,045

Other assets

31,799

29,825

Total assets

$

1,262,125

$

1,263,433

LIABILITIES AND SHAREHOLDERS' EQUITY

Notes and loans payable

$

274

$

312

Accounts payable

43,756

43,305

Accrued liabilities

85,151

95,195

Current maturities of long-term debt

51,699

51,666

Income taxes payable

7,199

9,531

Total current liabilities

188,079

200,009

Long-term debt

428,477

432,918

Other noncurrent liabilities

104,262

106,827

Deferred taxes and other liabilities

12,714

12,389

Total liabilities

733,532

752,143

SHAREHOLDERS' EQUITY

Preferred stock, par value $5.00 per share;

authorized 2,000,000 shares; none issued

-

-

Class A Common Stock, par value $.001 per share;

authorized 100,000,000 shares; issued 37,368,649 in 2017

and 37,319,266 in 2016

37

37

Class B Common Stock, par value $.001 per share;

authorized 25,000,000 shares; issued and

outstanding 3,233,998 in 2017 and 2016

3

3

Additional paid in capital

427,017

425,953

Retained earnings

528,227

522,855

Accumulated items of other comprehensive income:

Translation adjustments

(123,172

)

(133,298

)

Pension and postretirement liability adjustments

(51,748

)

(51,719

)

Derivative valuation adjustment

1,458

828

Treasury stock (Class A), at cost 8,443,444 shares in 2017

and 2016

(257,136

)

(257,136

)

Total Company shareholders' equity

524,686

507,523

Noncontrolling interest

3,907

3,767

Total equity

528,593

511,290

Total liabilities and shareholders' equity

$

1,262,125

$

1,263,433

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOW

(in thousands)

(unaudited)

Three Months endedMarch 31,

2017

2016

OPERATING ACTIVITIES

Net income

$

10,974

$

13,316

Adjustments to reconcile net income to net cash (used in)/provided
by operating activities: